Financial History Issue 127 (Fall 2018) - Page 19

annual meeting could cause the introduc- tion of restrictive and undesirable legisla- tion. Second, the annual meeting imposes a discipline on management because it is in effect, an annual audit of management’s stewardship of the business.” The Gilberts announced in their 1979 report that it would be their last, and they left the stage having succeeded in making the annual meeting an important forum and holding managers account- able to shareholders. They helped profes- sionalize the fields of investor relations and corporate governance, manifest in the founding of numerous periodicals in this era that continue today, such as Directors & Boards and NACD Directorship. Their contributions endure, even as the era of the individual shareholder seeking a voice in corporate affairs was dwarfed by power- ful institutions more capable of holding managerial feet to the fire. Institutional Ownership and Corporate Identity Wilma Soss speaks into a megaphone at the 1956 New York Central annual meeting. The woman behind her is Emma Chambers Maitland, a “professional wrestler/entertainer” who Soss hired as her “bodyguard.” advocated for abolition, in favor of voting by mail. But shareholders overwhelmingly pushed back and stock exchanges ruled that the consent method did not meet their requirement to have an annual meeting. Virtually no corporate leaders con- curred with Fuqua, and by 1975 The New York Times called his cause “notably unsuccessful.” By then, corporate America has clearly sided with the Gilberts. NYSE Chairman James J. Needham explained that the annual meeting is “the basic forum of shareholder democracy and an important stimulus to candid corpo- rate self-analysis.” The head of Houdaille Industries, Gerald C. Saltarelli, elaborated: “Shareholders should have the opportunity to personally question the management on company affairs and to obtain answers. [T] his questioning forces a discipline upon management to prepare for them and to re-think the company’s past performance from a shareholder’s standpoint.” In a 1976 article, the general counsel of DuPont, Donald E. Pease, later a pro- fessor at Delaware Law School, advised: “The annual meeting serves a practical purpose for two reasons. First, it is neces- sary to preserve the ‘legend’ of corporate democracy and the elimination of the From 1980 through 2010, as ownership of public company equity shifted from individuals to institutions, the prevail- ing shareholder-manager power dynamic changed. During this era, companies increasingly communicated to sharehold- ers throughout the year, always at regular quarterly intervals and often more fre- quently, approaching a continuous disclo- sure model. Yet while ownership and communi- cation changed, the annual meeting remained a staple of corporate life, an important opportunity for shareholders— both individuals and representatives of institutions—to meet management, pose questions, press issues and resolve debate. But if the prior era’s annual meet- ings stressed individual shareholders and associated “democratic” rights, this one increasingly brought out corporate iden- tity and culture. For example, Ben & Jerry’s Homemade, from 1984 until its sale to Unilever in 2000, attracted a crew of socially responsible owners to a meeting that looked more like Woodstock than Wall Street. Held among cattle farms near Burling- ton, Vermont, the founders ran the meet- ing informally, weaving in the vocabulary of hipsters: co-founder Jerry Greenfield might intone, “Hey, man, time for a lit- tle Q&A.” The company’s commitment www.MoAF.org  |  Fall 2018  |  FINANCIAL HISTORY  17